Fire and Rehire

From Tesco’s lost battle to new legislation

In recent years, the practice of "fire and rehire" has come under scrutiny, particularly highlighted by disputes involving major retailers like Tesco. This approach, where employers dismiss workers and then offer to rehire them under new, usually less favourable terms, has sparked significant controversy.

The Tesco Case

Going back to 2020, Tesco, the largest supermarket in the UK, faced backlash when it tried to change the work contracts for employees, especially in its distribution centers.

The company aimed to alter working conditions, including shifts and pay structures, arguing that these changes were necessary for operational efficiency. However, this led to widespread protests and accusations of unfair work practices, with unions arguing that Tesco was leveraging the pandemic to weaken employee rights.

Tesco claimed these changes were needed for the efficient running of the business, but many workers felt this was an unfair move, especially during the pandemic.

The situation escalated as workers, supported by the USDAW union, pushed back against the changes. Tesco's decision to utilise fire and rehire tactics became a focal point in the broader conversation about workers' rights in the UK, prompting debates in Parliament and calls for legislative reform.

Legislative Changes on Fire and Rehire

As part of a whole raft of new measures to enhance workers’ protections, the new Labour government – as promised in its manifesto - has introduced legislation to make fire and rehire unlawful in all but very limited circumstances.

Key aspects of the proposed legislation include:

1. Greater Transparency: Employers will be required to engage in more transparent negotiations with employees before resorting to termination and rehire.
2. Mandatory Consultation: Companies will need to consult with employees and their representatives for a specified period before making any significant changes to employment contracts, allowing for a fairer negotiation process.
3. Enhanced Protections: The new legislation will make it automatically unfair to dismiss an employee for refusing a contract variation.

Implications for Workers and Employers

These potential changes could significantly alter the relationship between workers and employers across the UK. For employees, the reforms promise greater job security and fairness, balancing the power in contract negotiations. For employers, while the new legislation might complicate how they make changes, they also provide a chance to create a more positive workplace culture.

The Tesco case was very fact specific, but highlighted the need for fair treatment of workers and raised the profile of this particular battleground and the changes will affect many different industries

It is a particularly significant change amongst the many measures to be introduced into law by the 2024 Employment Rights Bill, shaping the future of work in the UK.

How can we help you?

At Patch Law we can help you navigate this changing landscape, whether you’re an employer looking to make changes to employment contracts in a legal and compliant manner, or an employee who is facing changes to your contract and wanting advice on whether your employer has acted appropriately and compliantly.  Patch Law can provide guidance and support your needs, ensuring that all parties understand their rights and responsibilities under these impending changes.